Derivative Income

12 Months Ended

Dec. 31, 2015

Derivative Income

Derivative Income

19.Derivative Income

During the years ended December 31, 2015 and 2014 the Company recorded approximately $1.3 million and $1.7 million respectively, of warrant derivative income related to a decrease in the fair value of the liability recorded for warrants to acquire the Company’s common stock (see Note 14).  The warrant liability has been recorded at fair value as of December 31, 2015 and 2014 based primarily on a valuation performed by a third party expert using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy.  The valuation model takes into account the probability that the Company could issue additional shares in a future transaction at a lower price than the current exercise price of the warrants.  Significant inputs to the valuation model included prices for the warrants disclosed above, the probability of an additional issuance of the Company’s common stock at a lower price than the current warrant exercise price and the inputs in the table below for the respective periods.

During the year ended December 31, 2015 the Company recorded approximately $0.6 million of derivative income related to a decrease in the fair value of the derivative liability related to the Sentient Loan (see Note 11.) The derivative liability has been recorded at fair value as of December 31, 2015 based primarily on a valuation performed by a third party expert using a Monte Carlo simulation, which falls within Level 3 of the fair value hierarchy.  Significant inputs to the valuation model included: 1) the probability of successfully achieving stockholder approval of the Loan’s conversion feature, 2) future variations in the Company’s stock price, and 3) the probability of entering into an equity transaction prior to the Loan maturity date that would lower the conversion price as well as the inputs in the table below for 2015.

	At December 31,
The Company’s	2015			2014
Closing stock price	$	0.20		$	0.54
Volatility	85.00		%	90.00		%
Risk-free rate	1.48		%	1.60		%